ANIMATION WORLD MAGAZINE - ISSUE 5.7 - OCTOBER 2000

Give Us Your Money: 4Kids Entertainment Attains Poké-Momentum

by Brett Rogers

It's an anniversary many parents would like to forget: two years ago last month, the wallets of North America collectively opened to welcome the arrival of 151 pocket monsters to our shores. Since then, Pokémon has grown from what most people outside of Japan knew only as a strange, seizure-causing curiosity into a multi-billion dollar juggernaut. Seemingly, every aspect of American life from Eggo waffles to Radio City Music Hall has capitulated to the power of the Pokémon franchise. How did this happen? Who deserves the credit (or blame)? Meet 4Kids Entertainment, the fastest-growing company in America, according to Fortune magazine. Once a company known only as a money-losing licensing agent and production company whose properties included Mr. Men and Monster Wars, 4Kids has successfully turned Pokémon into an international craze.

A million dollar cast of characters. © Warner Bros. No other uses are permitted without the prior written consent of owner. Use of the material in violation of the foregoing may result in civil and/or criminal penalties.

A New Beginning
In 1997, Alfred Kahn, Chairman and CEO of 4Kids Entertainment, promised his company's shareholders that he would boost the company's flagging licensing business by concentrating on fewer properties with higher potential and longer life spans. With an eye on that goal, the company inked a deal with Nintendo that year to become the exclusive licensing agent for Nintendo-owned properties (including Pokémon) in all territories outside of Asia. As head of marketing for Coleco in the early 1980s, Kahn was the mastermind behind the Cabbage Patch Kids phenomenon that caused riots in toy stores across the country. Now at the helm of 4Kids, Kahn was ready to stage a repeat performance with Pokémon.

This small, New York City-based company is actually several companies in one: Leisure Concepts is 4Kids' full-service licensing agency, which serves as a go-between for trademark owners like Nintendo, and companies that license characters for consumer products like clothing and toys. This division is largely responsible for the explosive proliferation of Pokémon products, signing over 500 licensees like Topps, Wizards of the Coast and Hasbro to lucrative deals.

Summit Media Group handles 4Kids' media buying and program distribution services, placing advertisements for toy companies on television networks airing children's shows. Summit handles syndication of the Pokémon television show.

4Kids Productions is the group's television, film, music, theatrical and home video production company, which has adapted the Pokémon and Pokémon: The Johto Journeys television shows, Pokémon the First Movie: Mewtwo Strikes Back and Pokémon: The Movie 2000 to audiences outside of Japan. A third Pokémon movie is scheduled for North American theaters in 2001.

Pickachu from Pokémon. © 2000 Warner Bros. All Rights Reserved. Permission is hereby granted to reproduce this photograph for publicity, promotion or advetising connected with the program depicted herein and for no other purpose.

4Kids' performance as agent for Nintendo has been lucrative, to say the least. In return for planning and executing the marketing campaigns that ensure Pokémon remains at the top of animated programming and a profitable product for licensees, 4Kids gets a cut of Nintendo's licensing fees. While 4Kids has never publicly disclosed what its royalties are, estimates place the number at about three percent of Pokémon's wholesale sales outside of Asia.

Despite headlines that decry Pokémon as a fad that is plummeting from the peak of its popularity, Pokémon continues to accelerate, defying non-believers. Love it or hate it, Pokémon is actually getting bigger. NPD Group Toy Services Firm, a research firm with relationships with 60% of retailers in the United States, says that Pokémon is "as strong as ever," and that the Gold and Silver video games will increase the franchise's momentum.

Over $3 billion in Pokémon-related sales are expected this year, double Pokémon's first 12 months of sales. 4Kids' net revenue for the first half of 2000 was over $44 million, a 403% increase over the first half of 1999. 4Kids signed 159 new Pokémon licensees during April, May and June 2000 alone, with everyone from Toy Biz to H.J. Heinz of Australia forking over millions of dollars for the privilege of placing the visage of Pikachu or Charmander on their products.

In one area where Pokémon sales slipped, 4Kids still managed to find a way to profit. While Nintendo's Pokémon Yellow and Pokémon Trading Card game titles dropped to the number two and three video game titles in the U.S. for much of 2000, the number one spot was claimed by Perfect Dark, also a property represented for merchandise licensing by 4Kids Entertainment.

 
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